Roku has announced the latest partner to accelerate its T-Commerce play: Shopify. The collaboration will position Shopify merchants and their products as targeted ads throughout the Roku user experience. This includes the ability to transact through the TV interface or a “second-screen” mobile handoff.
Backing up, what is T-Commerce? As its name implies, and as the deal above signals, it involves shopping on your TV. With the growth of CTV products like Roku and Apple TV – versus linear/broadcast television – things are digitized… which opens the door for web-like targeting and e-commerce.
With these macro trends has come a push to bring more shopping to the living room. This is also part of the broader shoppability trend in many consumer touch points – everything from YouTube to Instagram. It’s all about making traditionally upper-funnel formats more actionable and transactional.
For Roku, the Shopify deal is just the latest in a series of moves to build out its T-Commerce play. Past moves include partnerships with Walmart and Doordash. The idea is to diversify its business through greater ad revenue. Its eCommerce partners are meanwhile attracted to its 70 million users.
Comfort and Cognition
Zeroing in on the details of the Shopify collaboration, it’s more of a push than a pull. In other words, rather than TV viewers actively navigating to a Shopify channel to browse and shop for things (questionable living-room behavior) they’re targeted for specific products through Roku’s Action Ads.
These ads are targeted based on several privacy-compliant triggers such as viewing history, geography, audience look-alike profiles, and other anonymized factors. Ads show up in various places such as the idle screen inventory when a show is paused, and other non-interruptive moments.
Once a user decides to interact with an ad – in this case, product spotlights – they have several options. They can transact on the spot using their Roku remote and a Roky Pay account. Those more comfortable with their mobile device UX can scan an on-screen QR code or follow text prompts.
This optionality is key for any T-Commerce play, given that shopping on your TV isn’t culturally a thing yet. Any new behaviors like this need to accommodate consumers existing comfort and cognition. On the bright side, Roku and Apple have already trained consumers to buy movies with a TV remote.
First-Party Advantage
Stepping back to the broader CTV angle, all the above comes at an opportune time. As we’ve examined, streaming and CTV advertising are surging. This is mostly due to the privacy-inflicted ad-world shifts that are causing budgets to move from behavioral targeting (e.g. social ads) to contextual targeting.
That brings back the heydey of pre-digital advertising when ads were placed based on adjacent content. Here, Roku can do a bit of both – contextual targeting informed by whatever movie or show is playing, and some behavioral targeting, as noted, based on its first-party data for users’ viewing habits.
The magic words are “first-party,” which makes the whole thing privacy-compliant. Roku isn’t buying or selling user data with ad networks but utilizing self-contained data from user behavior under its own roof. Along with contextual targeting, this first-party advantage is a big factor in the privacy-first era.
We’ll keep watching as the large screen gradually becomes a shopping touchpoint. It will take time for cultural acclimation to T-Commerce, as noted. After all, habits are hard to form so there will be a gradual learning curve. Meanwhile, it’s an important segment of the broader shoppability movement.
